Amaroq Minerals Ltd. (CVE:AMRQ): Is Breakeven Near?

With the business potentially at an important milestone, we thought we'd take a closer look at Amaroq Minerals Ltd.'s (CVE:AMRQ) future prospects. Amaroq Minerals Ltd. engages in the acquisition, exploration, and development of mineral properties in Greenland. With the latest financial year loss of CA$834k and a trailing-twelve-month loss of CA$6.7m, the CA$357m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Amaroq Minerals will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Amaroq Minerals

Amaroq Minerals is bordering on breakeven, according to the 2 Canadian Metals and Mining analysts. They expect the company to post a final loss in 2024, before turning a profit of CA$21m in 2025. The company is therefore projected to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 71% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Amaroq Minerals given that this is a high-level summary, however, take into account that typically a metal and mining business has lumpy cash flows which are contingent on the natural resource mined and stage at which the company is operating. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 32% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Amaroq Minerals which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Amaroq Minerals, take a look at Amaroq Minerals' company page on Simply Wall St. We've also put together a list of pertinent factors you should look at:

1. Valuation: What is Amaroq Minerals worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Amaroq Minerals is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Amaroq Minerals’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com